ECON 200 UOFA EXAM 3 UPDATED TEST PAPER SOLVED QUESTIONS FULL SOLUTION PACK

ECON 200 UOFA EXAM 3 UPDATED TEST
PAPER SOLVED QUESTIONS FULL
SOLUTION PACK

●● identify GDP's major components
Answer: consumption + gross investment + government purchases + net
exports


●● consumption
Answer: all expenditures made by households on goods and services like
clothing, food, electronics, and recreation


●● what is included in consumption?
Answer: durable goods + nondurable goods + services


●● Government expenditure
Answer: all final goods purchased by federal, states and local
governments like police officers/tanks and labor resources like police
officers/teachers


●● gross invesetment
Answer: the dollar value of all new capital purchased and the expansion
of inventories in an economy

, ●● categories of gross investment
Answer: business fixed investment, residential investment, inventory
investment


●● business fixed investment
Answer: purchases by firms of new capital goods (ex: offices, factories,
tools, machinery)


●● residential investment
Answer: purchases of new homes + home improvements


●● inventory investment
Answer: changes in inventories from one year to the next


●● net investment
Answer: gross investment - depreciation (represents the net change in
capital stock during a year)


●● net exports
Answer: exports - imports


●● exports